TC Interview

Question 1

Leveraged Finance: Term Loan B

What is a Term Loan B (TLB)?

Answer 1

It is a large, interest-only loan used by Private Equity firms. Unlike a “Term Loan A” (which you pay back slowly), a TLB has a “Bullet Repayment” at the very end. This is why it’s popular—it keeps cash inside the business to fund growth.

Question 2

Leveraged Finance: Term Loan B

What is Covenant-Lite (Cov-Lite)?

Answer 2

Most TLBs are “Cov-lite.” This means the bank has fewer “Financial Covenants” (rules) to check if the borrower is healthy. Cov-lite loans shift the risk from the Borrower to the Lender, giving the client more freedom to operate.

Question 3

The Intercreditor Agreement

Answer 3

In big deals, there are multiple lenders (Senior vs. Junior/Subordinated). the “Waterfall.” If the company goes bust, who gets paid first? (Senior Debt then Junior Debt then Shareholders).

Question 4

Leverage Multiples:

Answer 4

Net Debt / EBITDA. This is how banks decide how much to lend. If a company has a “Leverage of 6 x,” it means they owe 6 times their annual profit.

Question 5

Security & Guarantees

Answer 5

Lenders don’t just “lend.” They take Security over the assets (like the mine or the software patents). If the client defaults, the lawyer’s job is to ensure the bank can legally seize those assets.